Sri Lanka to hire 60,000 state workers as people pay more taxes after default

REVENUE BASED: Under revenue based state expansion until 2019, more than half the money collected from the people went to state workers as spending based consolidation was abandoned. From 2020 taxes were cut for ‘stimulus’.

Wednesday November 5, 2025 3:30 pm

ECONOMYNEXT – Sri Lanka planning to 60,000 state workers in the future to fill ‘vacancies’ after allocating tax money to to hire 30,000 workers in the current year, a media report said.

Minister of Public Administration, Provincial Councils and Local Government Chandana Abeyratne was quoted as saying by the online portal of Sri Lanka’s Newsfirst televison that the process to fill positions in the Sri Lanka Administrative Service, Sri Lanka Engineering Service, Planning Service, and Accountants’ Service has already started.

Based on the recommendations of a Cabinet-appointed subcommittee, 226 candidates are being recruited to the Sri Lanka Engineering Service, the report said.

Selections are being made from candidates who obtained top marks at the examination held in March this year.

Sri Lanka has a bloated public service of around 1.5 million state workers with semi-government agencies and the country has an ageing population indicating that will be fewer private sector citizens to work and pay taxes to support the public service.

Central government workers also get lifetime pensions which are unfunded and are simply paid with tax money collected from the public each year.

There are attempts to get more female workers to the private sector workforce, who analysts say may generate goods and also work in the Middle East to support the already bloated public service and the nation.

Due inflation generated by the central bank and rupee depreciation, millions of Sri Lankan have been forced to leave the country and work in countries with fixed exchange rates or lower inflation.

Analysts have warned that the International Monetary Fund’s revenue based fiscal consolidation is a flawed concept as there is no real attempt to spending based consolidation (cutting costs).

Earlier this week, cabinet gave approval to hire 8,547 more state workers, mainly policemen.

Sri Lanka to recruit 8,547 more workers into public sector

The hiring spree is continuing while tax money is spent on ‘digitalizing’.

While the current administration is not hiring people willy-nilly as in the past and seems to be looking for actual ‘vacancies’ analysts say Sri Lanka has to review the cadre requirement and the way state agencies work given that there is an ageing population and the younger generations will find it difficult to support the public service.

If the younger generation cannot bear the tax burden and the weight of the state there could be more outmigration.

Sri Lanka also has very high vehicle taxes compared to other countries and import taxes on building materials have also made houses extremely expensive compared to salaries left after taxes.

The hiring is coming as the International Monetary Fund is proposing taxing houses to give more tax money to the government.

Since 2004 in particular hiring unemployed graduates has led to steep expansions in the public sector as well as a rise in unfunded pension liabilities, while a wartime military has not been demobilized.

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Sri Lanka defaulted in 2022 and people are now paying higher taxes in a bid to reduce budget deficits and national debt.

Before the default more than 80 cents of tax money went to pay salaries and pensions of the state worker. The ratio has now been brought down with heavy taxation of the people.

Each year some part of the public service retires. If the new hires exceeds the retirees, the public service will expand and use up more tax money. (Colombo/Nov04/2025)